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The case against consolidation - Page 2

Sup. David Campos, who called for the hospital costs hearing, observed that the cost of creating jobs includes health care benefits. "So to the extent that things like hospital consolidation are increasing costs, the hospitals themselves are implicated," he said.

But CPMC media relations manager Kevin McCormack noted that CPMC/Sutter has invested more than $7 billion since 2000 on technology, facility construction, and improvements to address medical needs and state seismic safety requirements.

"Sutter Health appreciates its role in ensuring that health care is affordable. And we realize that holding the line on prices without compromising quality will require additional cost reductions," McCormack said. "To this end, doctors and nurses and support staff throughout our Sutter Health network are working aggressively to substantially reduce expenses."

He denied that Sutter had engaged in inappropriate anesthesia billing practices. "The lawsuit paints a false and inaccurate picture," McCormack said.

He also said that plenty of competition remains in Northern California. "The decision by the California Public Employees Retirement System in 2004 to shift a significant number of members away from Sutter-affiliated hospitals to other providers demonstrates there's plenty of healthy competition," McCormack said.

But Campos said the hearing clarified that, while there are different factors why costs are going up, one of the most important is hospital consolidation. "We need to ensure that we understand that, even in face of higher labor and cost of living costs, hospital costs in Northern California are still 30 percent higher than Southern California," Campos said.

Noting that CalPERS excluded Sutter from its network, Campos added: "We need to follow suit in terms of saying that we're only going to do business with hospitals that are responsive to our concerns and follow best practices."